• PARP inhibitors could become central to cancer treatment by stopping cellular repair: Tumor cells are more dependent on DNA repair than normal cells, and PARP inhibitors are more effective in tumors that are defective in other repair enzymes. Importantly, these repair mutations appear in a broad range of tumor types, providing opportunities for PARP Inhibitors.

• PARP inhibitors could be used as monotherapy: PARP inhibitors alone have been shown to extend life of ovarian cancer patients. Breast cancer is next followed by multiple other tumor types.

• PARP inhibitors will likely benefit immune-therapy: We believe PARP inhibitors will likely be used in combination with checkpoint inhibitors due to mechanistic synergies. Clinical data has shown that PD-1 inhibitors are more effective in tumors with high mutational burden and PARP’s can increase mutational burden by inhibiting DNA repair

• “PARP inhibitor” stocks have worked: On the back of positive data, stocks with PARP inhibitor exposure have worked — Tesaro ($91.60, Buy) is up 112%, and Clovis Oncology ($27.65, Buy) is up 41%, and Medivation (MDVN) ($80.81, Neutral), which was acquired in part for the value of their PARP inhibitor is up 107% — versus 6% for Nasdaq Biotech Index and 14% for the NYSE ARCA Biotech Index.

• Big pharma is showing interest: Until last month, only two large pharmas had PARP inhibitors, AbbVie (ABBV) and AstraZeneca (AZN) — Pfizer (PFE) is acquiring Medivation in part due to their PARP inhibitor, and recently Gilead announced their interest in PARP inhibitors.

Shares of Gilead Sciences have fallen 1.2% to $77.92 at 1:28 p.m. today, while Tesaro has ticked up 0.2% to $93.34, Clovis Oncology has gained 1.7% to $28.53, AbbVie has declined 1.1% to $63.39, AstraZeneca has slumped 1.6% to $32.71, Pfizer has slipped 1.6% to $34.10, and Medivation is unchanged at $81.00. The iShares Nasdaq Biotechnology ETF (IBB) has fallen 1.6% to $282.53, while the SPDR S&P Biotech ETF (XBI) has dropped 1.8% to $62.29.

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.